The term "Bunker" refers to the fuel that is used to operate ships. end to end bunkering optimization strategy, to achieve bunkering cost savings and maximize value creation, as well as the careful, Boston Consulting Group: Bunkering Optimization. The charge covers extra bunker cost, insurance coverage, and additional security measures. The rate is similar … Bunkering procurement has a direct impact on profitability for shipping companies; with bunker fuel cost exceeding 60% of voyage costs it accounts as the biggest operational expenditure for ship owners and charterers.. Bunker Purchasing with Contracts Federico Farina, Peter Neergaard Jensen, Christian E. M. Plum and David Pisinger I. Wikibuy Review: A Free Tool That Saves You Time and Money, 15 Creative Ways to Save Money That Actually Work. Avoiding the immediate cost of technology or service provision may be viewed by shipping companies as an opportunity to cut costs. The act of supplying a ship with bunkers is known as bunkering.. A major portion of the ships operating cost is “bunkers”.. As you may have seen, oil prices are quite volatile, and therefore ship operators or owners maybe unable to calculate a consistent operating cost for their ships.. Through transparent e-auctions and data collection and analysis Bunkering at Sea optimizes bunker costs, supports the establishment of a new performance management culture and accountability procedures within a company & strengthening competitive advantage in a volatile market. Visit our website to request a Demo. Since then, he has contributed articles to a It could go for about $10,000. variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, What is the North American Aerospace Defense Command (NORAD). Bunker fuel. The platform offers. In order to receive a bunker, shipping costs a pretty penny too. Also known as: Bunker, Bunkers. The platform: Saves time through simplified and transparent procedures, Securing your competitive advantage with Bunkering at Sea. The upcoming IMO 2020 environmental regulations will further increase bunker costs, resulting to tighter credit lines and shrinking profit margins for ship owners and ship managing companies. As bunker fuel prices are quite volatile, the shipping lines charge a fee called "Bunker Adjustment Factor (BAF)" to cover the fluctuations in global bunker costs. to maximize bunker value for money through new purchasing initiatives and supplier relations. As such decide to purchase a Platts Singapore High Sulfur fuel oil 380 CST swap at the current market price of $243/MT (approximately $38.26/BBL based on a conversion factor of 1 MT = 6.35 BBLs). The platform: Bunkering at Sea offers a transparent digital service for cost efficient trading solutions; by freeing up the commodity from the traditional advantage of intermediates in controlling market information and assets. December 3, 2018 - Mediterranean Shipping Company (MSC) has announced new bunker charges as of January 1, 2019 to comply with the 2020 sulfur cap, which is anticipated to cost the shipping industry $60 billion annually.. MSC has estimated that the cost of the various changes it is making to its fleet and its fuel supply is in excess of $2 billion dollars per year. The charge basically has to do with the actual loading of the goods into the hold or bunker of the transport vessel, and is considered to cover the costs of not only the loading but also the storage of the goods in the bunker for the duration of the trip. Others estimate extra costs for container shipping alone will be $35 billion to $40 billion. INTRODUCTION For shipping companies a very large part of the variable operating cost are for bunkers (fuel), for the vessels. ship's fuel) against a base level incorporated in the freight rate. Bunkering at Sea is the first integrated and independent web-based platform, to provide innovative/optimal network solutions for bunkering, through several type of electronic auctions. The shipping industry became very energy and capital focused with the development of containerization and usage of containers ships. Oil prices are quite volatile, and in order to counter the fluctuations in oil prices, the shipping lines charge Bunker Adjustment Factor (BAF) as a surcharge on top of the ocean freight.. Bunker is simply nothing but fuel used in ships so emergency surcharge is simply a surcharge charged by the shipping line to counter the fluctuations in fuel prices. Bunker Adjustment Factor Tips: Smaller charges like this can add confusion, so smaller customers usually receive or should ask for, an all-inclusive port to port charge. devotional anthologies, and several newspapers. Ship & Bunker - News, Exclusive Features, Bunker Price Indications - The World's Most Read Publication for the Marine Fuels Industry Unlike the narrow rectangle of shipping container bunkers, a concrete block bunker can be built just like you want/need it. This particular aspect of the rationale for the bunker charge is known as a fuel adjustment factor. In such an industry fuel could be considered one of the most critical costs where the fuel may be as high as 50% of the carriers cost. within a company & strengthening competitive advantage in a volatile market. Registered members have access to bunkering transaction history with real time prices for comparison, future reference and record tracking. Then, there excavation and installation, becausebunkers are buried at least 6-feet underground. Responsibilities for actions that affect bunker costs are typically scattered throughout an organization, both on shore and at sea, and the various teams involved often resist new ways of tackling familiar tasks. India’s exports have bounced back rather spectacularly, said Maersk, the world’s biggest container shipping line. comprises of ten elements to be considered, including: , Voyage Execution, Charter Value, Technical Efficiency and Fleet Optimization. In addition, three shipping giants, Maersk, MSC, and CMA CGM, have announced introduction of Emergency Bunker Surcharges, due to the increasing fuel costs. It was imposed to make up for the extra charges incurred during the shipment of goods. Bunkering at Sea offers clarity, speed, transparency and tracking for all bunkering fuel sales interactions among Ship Owners, Charterers, Suppliers and Brokers. The ship operator is responsible for the payment of these bunkers to the bunker supplier. Learn about a little known plugin that tells you if you're getting the best price on Amazon. The firm notes that freight prices have fallen while bunker costs have risen, at times exceeding 50 percent of total operational costs, and bunker prices have become "extremely volatile" as crude prices fluctuate. According to Ronen, when bunker fuel price is around US$500 per metric ton, bunker fuel cost constitutes about three quarters of the operation cost of a … This fuel cost, generally known as bunker cost or ship fuel cost, is deeply connected with raw petroleum costs. Find out more about the efficiencies of our platform today. Bunker Adjustment Factor or BAF is an additional surcharge levied on the ship operators to compensate for the fluctuations in the fuel prices. The most commonly used type is residual fuel oil bunker or Bunker C.. Grades of Bunker fuel. Bunkering procurement has a direct impact on profitability for shipping companies, ; with bunker fuel cost exceeding 60% of voyage costs it accounts as the biggest operational expenditure for ship owners and charterers. Bunker fuel is any fuel used on board a ship. In the current challenging markets, shipping companies must focus on reducing their bunker costs, the Boston Consulting Group (BCG) has said.. league baseball, and cycling. That’s why we provide all in rates, meaning that the cost of transportation includes all the additional fees and surcharges provided for under the conditions of carriage. A 20 foot long x 8.6 foot high wall needs 12 blocks for the height and 15 blocks for the length. Bunkering at Sea. The shipping lines have quoted rising fuel costs as justification for the emergency surcharge, with 2M partners Maersk and MSC, and Hapag-Lloyd claiming that the high bunker prices are no longer sustainable. BAF represents the floating price level of fuel in ocean freight shipping and is typically updated on a quarterly basis. The precipitous drop in bunker prices has led to increased savings for shipowners. In addition, the weight of the goods being shipped, as well as the total amount of space taken by the goods, will have some impact on the amount of charges assessed. In recent years, the bunker fuel costs have increased considerably to more than half of a shipping company's total operation costs. Doing so helps buyers to have some idea of what to expect and can consider this element of the purchase and shipment along with other factors in order to decide if the purchase is really the best option. BAF is based on Twenty-foot Equivalent Unit (TEU) and varies according to the trade routes. The nature of the goods, and any special precautions that must be taken in handling and storing the goods, will also have an influence on the final amount of the charges. Low sulphur surcharges originate from an International Maritime Organization (IMO) initiative to reduce the amount of sulfuric fuel emissions burned by ocean vessels. Visit our website to request a Demo! These additional charges is “the trickle down cost” while frustrating for the shipper. With the cost of bunker fuel at $552 per ton, and with fuel consumption of 217 tons per day, a single 28-day round trip voyage for this one vessel would produce a fuel bill of $3,353,952. It is a transparent, Bunkering Fuel Sales Platform that offers cost-efficient solutions and business intelligence tools, connecting all quality players in the market. The distance from the port of origin to the port of destination will come into play, since traveling that distance does involve the consumption of fuel. In the midst of declining oil costs, CNBC reports that “The normal day by day fuel cost to work a VLCC has tumbled from over $75,000 to under $18,000.” Bunkering is the action of supplying a ship with bunkers. The unit cost of a small-scale bunkering facility is 15 million €, while the cost estimate used for LNG fuelling station is 400,000 €. It is an additional cost charged by the shipping line for handling cargo in dangerous regions including hazards, violence or piracy. The aforementioned efficiencies strengthen competitive advantage for both ends of the market, offering a new way to support fast and more accurate business decisions. Through transparent e-auctions and data collection and analysis Bunkering at Sea. Achieving bunker cost reductions can be difficult and complex with internal organizational dynamics often hindering cost-reduction initiatives, according to a BCG Bunker Report. This BAF is usually aligned with the movement of the oil prices much like the fuel for our cars.. trivia, research, and writing by becoming a full-time freelance writer. offers a transparent digital service for cost efficient trading solutions; by freeing up the commodity from the traditional advantage of intermediates in controlling market information and assets. What Are the Different Types of Distance Selling Regulations? The fee will be applied to bookings that are from, to or transited through the affected areas. Bunker Fuel Market Outlook - 2027. This number could be greater for a number of reasons, such as if the voyage were more than 14 days long, or if the vessel were smaller and less fuel-efficient per container, or if scheduling delays required the vessel to … In many nations, trade laws address how a bunker charge may be assessed, with some being very strict in terms of the use of specific formulas for the task while other nations require only general guidelines that leave a great deal to the discretion of the shipping line. The aforementioned efficiencies strengthen competitive advantage for both ends of the market, offering a new way to support fast and more accurate business decisions. A national or international shipping organization can also decide to use an emergency bunker surcharge as well. It is designed to facilitate day-to-day bunkering business & Long time Bunker contracts while providing flexibility and the ability to manage multiple orders or offers simultaneously. Registered members have access to bunkering transaction history with real time prices for comparison, future reference and record tracking. The platform offers customized statistical analysis tools to support smart business decisions for both ends of the market. web-based platform, to provide innovative network solutions for bunkering, through several types of electronic auctions. The rationale for assessing a bunker charge is normally based on the added operational expenses that the shipper takes on in order to transport the goods. Boston Consulting Group: Bunkering Optimization According to Maersk, bunker prices in Europe … The strategic BCG bunkering optimization framework comprises of ten elements to be considered, including: Planning, Procurement, Voyage Execution, Charter Value, Technical Efficiency and Fleet Optimization. An individual shipping line in a particular region can decide to include the addition of an emergency bunker surcharge. Shipping rates calculation is complicated, especially there are special rules applied to different routes. But in reality, this short-term view could actually increase costs in the medium to long term. Is Amazon actually giving you the best price? Namely, fuel prices have increased by more that 30% this year, and almost 70% since last June. In order for shipping companies to achieve Bunker cost efficiency, the report recommends: An end to end bunkering optimization strategy to achieve bunkering cost savings and maximize value creation, as well as the careful evaluation of each step of current bunker processes. Reducing bunker costs can be a critical step in creating and sustaining competitive advantage. Bunkering at Sea is the first integrated independent web-based platform, to provide innovative network solutions for bunkering, through several types of electronic auctions. 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